7 Reasons Not to Worry This Week
Things aren't always pretty out there.
Last week may have closed out with the biggest Internet IPO in years, but there's a lot of uncertainty out there. There have been plenty of implosions this earnings season, and we're probably not done yet.
I recently went over some of the companies posting lower quarterly profits and hosing down their near-term outlooks.
Thankfully, they're the exceptions and not the rule. Let's go over some publicly traded companies that are expected to stand tall this week by posting year-over-year improvement on the bottom line.
Latest Quarter EPS (Estimated)
Year-Ago Quarter EPS
|International Game Tech (NYS: IGT)||$0.23||$0.18||Add|
|Green Mountain Coffee (NAS: GMCR)||$0.48||$0.22||Add|
|Jamba (NAS: JMBA)||$0.03||($0.02)||Add|
|Silver Wheaton (NYS: SLW)||$0.50||$0.16||Add|
|Molycorp (NYS: MCP)||$0.66||($0.14)||Add|
|NVIDIA (NAS: NVDA)||$0.26||$0.15||Add|
|Spreadtrum Communications (NAS: SPRD)||$0.67||$0.37||Add|
Source: Thomson Reuters.
Clearing the table
Let's start at the top with IGT.
The maker of casino equipment has beat Wall Street's profit estimates for three consecutive quarters, bumping its guidance higher along the way. Las Vegas and Atlantic City may not be hot markets these days, but think about all of the cash-strapped states legalizing gambling to help build up their coffers. More importantly, start looking abroad. If you're not familiar with the red-hot gaming market in Macau, look into it.
Green Mountain may be burning David Einhorn dolls in effigy, but its best chance to prove itself worthy will be on Wednesday when it steps up for its quarterly report. Analysts see earnings more than doubling for the company behind the Keurig single-cup brewing system, a far cry from some of the ho-hum financials that investors saw from other java heavies last week.
Going from warm beverages to chilly ones, Jamba Juice parent Jamba is expected to reverse a year-ago deficit with a reasonable profit. Investors better not get used to it. This is a seasonal business, and Jamba lives and dies by its summertime quarter when heat-parched patrons in its Southern California stronghold need to cool off.
Silver Wheaton isn't the name of one of actor Wil Wheaton's kids -- I hope. Silver Wheaton is actually a Vancouver, Canada-based silver streaming company with interests all over the world. Interest in precious metals may have been waning in recent weeks but silver's appreciated quite a bit over the past year.
Molycorp specializes in rare-earth metals, one of the more volatile specialties over the past year. JPMorgan's Michael Gambardella downgraded Molycorp back in September -- marking down his price target from $105 to $66 -- as the speculative buzz was wearing thin. The good news for those approaching Molycorp with fresh eyes is that stock is already down to $40, so the price target represents a healthy advance from today's levels. It also helps analysts see some serious bottom-line improvement when it reports Thursday.
NVIDIA is the graphics processor giant that's been making inroads into the trendy gadgetry that's eating into its traditional PC business. Clearly it's working, as analysts see NVIDIA earning $0.26 a share in its latest quarter, up sharply from last year's $0.15 a share showing.
Finally, we have Spreadtrum Communications, a fast-growing provider of baseband solutions for wireless companies. The Shanghai-based company is a scorcher. Wall Street sees revenue and earnings per share climbing 85% and 81%, respectively, in its latest quarter.
Cross those fingers, but know the fundamentals
Investors in these seven stocks have a right to be excited. They are all improving their financial situations. They are worthy of the gains that the market rally has bestowed upon them over the past year.
I wouldn't be uncomfortable owning any of these companies. They're doing the right thing, regardless of Mr. Market's mood swings.
The expectations may be high, but these seven stocks wouldn't have it any other way.
Are you a buyer or a seller of stocks these days? Share your strategy in the comment box below.
At the time this article was published The Motley Fool owns shares of International Game Technology. Motley Fool newsletter services have recommended buying shares of NVIDIA and Green Mountain Coffee Roasters; writing puts in NVIDIA; and creating a lurking gator position in Green Mountain Coffee Roasters. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for Jamba. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.